The quiet supplier of the AI boom: Jabil makes what data centers can't be built without
Revenue tied to artificial intelligence rose in a single year from $9 billion to $13.6 billion and already accounts for about 39% of total revenue. The company does not design chips or operate clouds. It assembles servers, racks, cooling and power systems for the largest data center operators. Its shares trade at less than 19 times model earnings for the next fiscal year, while direct competitors trade at 25 to 32 times.
Key points
AI revenue rose 50% year over year to $13.6 billion. That makes up about 39% of total revenue. At a similar pace, it would reach approximately $20 billion in the next fiscal year.
Core earnings per share are expected to grow 30% to $12.70 in fiscal 2026. Management raised guidance for the third consecutive quarter.
The $725 million acquisition brought power infrastructure from grid connection to the individual rack. This moves the company from server assembly to higher-margin activities.
The 5.8% core operating margin lags Celestica by more than 2 percentage points. This gap is the main reason for the valuation discount relative to competitors.
A DCF model in the base scenario yields a value of $270 per share, 15% below the market price. By multiples, however, the stock at under 19 times model earnings is cheaper than competitors.
When people talk about investments in artificial intelligence, market attention focuses on chipmakers and hyperscalers that spend hundreds of billions of dollars a year on them. But between the graphics processor and a functioning data center lies a long chain of physical work. Someone must populate printed circuit boards, assemble servers into racks, provide liquid cooling and power distribution, and test the equipment before it ships to the customer.
That work is done by one of the world's largest contract electronics manufacturers. The company, with more than 100 plants and a sixty-year history, long counted as a low-margin assembly business heavily dependent on one consumer customer. Over recent years it has restructured. In fiscal 2024 it sold its mobility division, shifted capacity to data centers, and today AI infrastructure brings in roughly two-fifths of revenue.
Its investment relevance stems from two things. Demand for complete rack solutions is growing faster than the market for ordinary electronics, and management raised guidance three times in a row during fiscal 2026. Moreover, the stock has lost more than a quarter from its summer high of $428.93, and the market values it significantly below direct competitors. The valuation gap has its reasons, but their weight changes over time.